PayTM’s Strategic Move amidst Turmoil
In the midst of widespread crises, a new acquisition is on the horizon for the fintech giant PayTM. Reports suggest that PayTM is poised to acquire the Bangalore-based e-commerce startup Bitsila. The finalization of this deal is currently underway, with completion expected as early as next week.
Impending Deal with Bitsila: A Strategic Endeavor
According to a report by ManiControl, PayTM is swiftly moving towards acquiring Bitsila. Bitsila, an interoperable e-commerce startup, currently operates on ONDC. With its transactions predominantly conducted through ONDC, Bitsila stands as the third-largest company by vendors on the platform. Sources cited in the report indicate that the deal is nearing its final stages, with expectations for its completion in the coming weeks.
Genesis of Bitsila: A Tale of Innovation
Bitsila traces its inception back to the collaboration of Dasharatham Bitla and Surya Pokalla in 2020, as per information provided on its website. Prior to this, the startup had secured funding in its pre-seed round from Antler India and founders of Redbus, Phanindra Sama. Functioning as a seller-side application, Bitsila primarily operates in the business-to-business segment, aiding small businesses in onboarding onto ONDC.
RBI’s Action on Payment Banks
The timing of PayTM’s acquisition coincides with deep-seated issues within its banking unit. The Reserve Bank of India recently took action against PayTM Payments Bank, imposing several restrictions. RBI has prohibited PayTM Payments Bank from acquiring new customers and has immediately halted its credit business. Additionally, in the past few days, PayTM’s shares have plummeted by over 50%.
PayTM’s Pre-existing Presence on ONDC
Considering the proposed deal, PayTM stands to bolster its e-commerce presence significantly. PayTM already operates on ONDC, providing services since 2022 and integrating its app into governmental e-commerce platforms, alongside other major players. Presently, PayTM’s services on ONDC exist under the moniker of the Bayar app.
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